Cannabis Trends

New Cannabis Trends for 2019: What’s Hot In The Marijuana Sector

This week’s Green Market Report and AxisWire released
the 2019 Cannabis Trend Report. This is the third annual report detailing the major trends in the
cannabis industry highlighted by the press releases and headlines published
throughout the year. The report plunges into the worldwide industry’s hottest
topics and looks at where the trends will lead over the next few years. This market
insight helps investors, entrepreneurs and business operators navigate the marketplace.
Here are the key points highlighted in the report:

The Cannabis Brands
Sophistication and maturity

Cannabis consumers are increasingly becoming more
aware and sophisticated, and brands are starting to wake up to this new
reality. Companies like Green Thumb Industries (CNSX: GTII) are making
major investments to
acquire luxury brands like Beboe, coined “the
Hermes of marijuana” by the New York Times and the luxury brands themselves
have started to attract the interest of high net worth investors. As the U.S. gets
closer to the legalization of cannabis at federal level, expect to see a major
increase in the demand for luxury brands.

CBD will Take Center Stage Worldwide

Cannabidiol
(commonly known as CBD) is currently a hotter commodity than legal cannabis.
Thanks to the US legalization of hemp and CBD at the federal level, consumer
demand for CBD has gone through the roof. According to BDS Analytics and Arcview Market Research, the market for CBD sales in the US alone will exceed $20 billion by
2024. As a result, Canadian licensed producers are making significant
investments in the hemp sector.

At the beginning of 2019, Canadian cannabis company
Tilray (NASDAQ: TLRY), acquired Manitoba Harvest, the world’s largest
manufacturer of hemp food products, for over C$400 million. If the Food and
Drug Administration choose to regulate CBD as a nutritional supplement (and
treat it as Vitamin C, for example), as opposed to a pharmaceutical ingredient,
the market can expect to see similar deals as the demand for CBD continues to
soar.

Cannabis Media Outlets Consolidate

The cannabis media space is starting to
consolidate. Over the last year, the cannabis publisher High Times has
acquired other successful cannabis media outlets, such as Dope Magazine, Culture Magazine, and Green
Rush Daily. While High
Times is snatching marijuana media estate, the overall cannabis media market
remains unexplored by investors. As the cannabis industry worldwide continues
to evolve, and as the cultivation/manufacture/brands sectors become more
saturated, we can expect to see major investments to start pouring into
cannabis media.

Distribution is the Key

As the cannabis industry is becoming more
specialized, well-funded business operators are starting to monopolize the
cultivation and retail sector. As a result, discerning investors are looking to
find success in spaces like distribution. In California, the number of
distributors has grown to over 150. One of the largest and most respected
companies in California, Nabis Distribution, will take
their platform to additional markets in the coming years. The sector has the
potential to grow enormously over the next few years as states like Oregon
consider laws that would allow them to trade cannabis distribution inter-state.

Multi-State Business Operators
in the Rise

US states are taking big steps forward to legalize
cannabis on an individual basis. This legalization model has seen the rise of
“multi-state operators,” which are cannabis operators with the funds and
resources to compete in an increasingly challenging regulatory environment
across many US states. Currently, the three biggest multi-state operators
are: Green Thumb Industries (CNSX: GTII), Acreage Holdings (CNSX: ACRG.U), and MedMen Enterprises (CSE: MMEN). Given that a unified federal legalization is unlikely in the next few
years, it is highly likely that the companies with the capital to operate in
multiple states will continue to grow and absorb smaller competitors,
continuing to consolidate their market position.

Wall Street Is Making Moves

While the cannabis legalization is still an open
question mark at the federal level in the US, savvy investors are making big moves
on legalized cannabis. Encouraged by Canada’s 2018 legalization of recreational
cannabis, companies like Black Rock, Navy Capital, Ackrell Capital, and Canaccord Genuity Group Inc. are investing billions of dollars in cannabis. Over the last five
years, Canaccord alone has acted as an underwriter or lead bookrunner for over
a dozen different leading cannabis companies; including Canopy Growth, MedMen Enterprise, Acreage Holdings. It is
anticipated that this trend will continue incessantly.

Manufacturing
Infrastructures Are Booming

As seen in recent years, cannabis consumers are
becoming more sophisticated, so the products must also evolve. There is a
growing need for companies that can manufacture vape products, infused
products, pre-rolls, etc… so multi-state business operators are pouring big
money in building up their infrastructure. In the state of California alone, there are almost 600 cannabis manufacturers. As there is a growing
premium on sophisticated cannabis brand, expect to see similar growth in the
value of cannabis manufacturers.

Consumption Events on the
Rise

Social events, where attendees can consume
cannabis, are on the rise. While consuming cannabis in public is not permitted
in most states, some states like California do allow for special permits for
consumption-based events. The Cannabis Cup, Hall of Flowers , The Emerald Cup, and by
High Times are perfect examples. Attendees can purchase and consume cannabis
on-site in specially designated areas.As the concerns around cannabis consumption are in decline, it is highly
likely that consumption-based events will become very popular in North America.

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